The Illusion Behind The Bitcoin – The Next US Dollar or An IT Scam?
It is clearly that the money produced now by the state for the profits of many is not a solution today. A monetary reform will be imposed if we want to eliminate financial crashes and legalized stealing. The currency appeared to ease exchanges between people. It was the most convenient merchandise chosen for this.
At the beginning of the world, when economical trades were just establishing, there was no central organism to regulate exchanges. The market for any product was free, and the prices were established considering demand and offer. It was the closest thing to the “perfect market”. Problems appeared when governments of different countries felt the need to control currencies. This is how national banks appeared, opening the modern history page of currencies.
Criticism of Bitcoin
– As it has no value, it is hard to establish clear prices in goods and services. The value of gold and other currencies is essential for explain the dynamics of relative prices. This is why exchanges based on bitcoin are complicated, as they are based on money that is produced out of nothing.
– The creator of Bitcoin claims that it is not under the control of any government. This is wrong. As nothing is above the state laws of countries, a government can declare the bitcoin illegal. Moreover, some organisms such as the European Commission can impose this in many EU states at the same time. Bitcoin is not defined as “money”. This is a simple mechanism that can be controlled by states and used as a payment alternative.
– Electronic money exists, even if it is called US Dollar or the Sterling Pound. Forex operations create money all the time. The bitcoin has been seen as a threat by many governments, which prepare legislation for it.
– Lack of control of authorities creates the appearance that it is not an inflationist currency. The number of bitcoins grows geometrically. Finally, it will stagnate or it will remain constant. Until then, the value of bitcoin will grow. Even so, each payment made with a bitcoin affects its buying power.
– With a simple computer, you can produce bitcoins without great costs, and without significant control. This is the reason why inflation could appear.
– Bitcoin can serve the interests of states. By using it, the transactions will go through a server and they will be public. The state won’t have problems following it. On the other hand, this can only be done if the states regulate it. Otherwise, it is the exact opposite: a bunch of transactions that can’t be followed.
– Another problem is that we can buy bitcoins now. Maintaining the number of bitcoins fixed, it will be rarer and more expensive compared with dollars and Euros. In 2009, people bought 10 000 bitcoins with $50, five years later, it reached $1200. At a price of 10 000$/bitcoin, it will be interesting to make it with a press of a button.
When advanced definitions for financial terms were required, the specialists of those banks hurried to give them. This is how currency was defined as “any meaning that can be used to pay a debt”.
What is the Place of Bitcoin in the Economic World?
The Bitcoin was created in 2009 by Satoshi Nakamoto, as being an electronic currency (without its own value). According to the creators, it is not controlled by any government. This way, the possibility of “money printing” is eliminated, and inflation is not produced anymore.